Nextel, Verizon end wireless dispute

WASHINGTON (CBS.MW) - Nextel Communications and Verizon Wireless have ended a bitter legal spat, paving the way for Nextel to obtain valuable wireless spectrum and for Verizon to advertise a "push-to-talk" service.

Nextel is slated to move to the 1.9-gigahertz band of spectrum -- from the 800-megahertz band where it now operates -- to avoid interference problems with public-safety officials such as police and firefighters.

Earlier this year, Nextel
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won approval from the Federal Communications Commission to make the transfer, though the company could end up paying more than $4 billion to cover the cost of the shift.

After the vote, FCC Chairman Michael Powell said the issue generated "some of the most ruthless lobbying I've ever encountered."

Verizon, the most prominent opponent, had sought an open auction. The company tried to block the transfer by arguing that Nextel was getting the spectrum on the cheap. Verizon
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has now dropped its opposition to the FCC plan.

"The battle had become vitriolic and almost pointless," said John Ryan, president and chief analyst of the market research firm RHK.

On Tuesday, shares of Nextel rose 81 cents, or 3.1 percent, at $26.90.

In return, Verizon will be allowed to market a "push-to-talk" service or use the word "push" in any part of its marketing. Nextel had tried to bar rivals from using the word "push" in their services, claiming trademark violation. Yet analyst doubted that Nextel would succeed.

For years, Nextel has offered its mostly business clientele a "walkie-talkie" type of service that it calls push-to-talk, or PTT. Groups of users can push a single button to instantaneously reach one or several other Nextel customers.

In the next few years, however, Verizon and other rivals are expected to expand their own competing brands of push-to-talk service to grab a bigger slice of the business market.

Nextel, for its part, needs the 1.9 megahertz spectrum so it can offer new high-speed wireless services and so it can expand beyond the business market, which is saturated.

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